source allbankingsolutions.com
As scheduled today (i.e. 20th February, 2015) once again Mr M V Tanksale, Chief Executive of IBA and Mr K Unnikrishnan, Deputy Chief Executive of IBA appeared before the Chief Labour Commissioner (Mr P P Mitra) at Delhi for reconciliation meeting with UFBU.
Thus, the whole drama of dashing to Delhi by the highest officials of IBA (I assume some other lower functionaries must have accompanied them to assist) was enacted to befool Aam Banker. This must have led to a sizeable amount of expenditure and wastage of time for IBA team. Similarly, visit by UFBU leaders to Delhi must have made a hole in the pockets of Aam Banker as it is the expenses charged to the monthly subscription paid by bankers. The outcome was that next Tarikh for negotiations was fixed.
The end result was on the expected lines. CLC suggested both the parties for one more round of talks before the scheduled date of strike. Both the parties accepted the same gladly.
Next Act of the Drama will be now in Mumbai on 23rd February, 2015
The news ends here. However, this raises many important issues regarding the status and role of IBA, which I intend to uploading separately.
However, our readers know it very well that present Chief Executive of IBA (Mr Tanksale) is an Ex-Chairman of PS Bank. He has sufficient experience to understand the problems and salary structure of the bankers as he must have experienced the same upto the level of GM (From ED onwards they get salaries based on GoI scales). He has been given post-retirement posting and enjoying the benefits beyond the age of 60 years whereas Aam Banker is being made to run from pillar to post for revision of the pay scale during his service period itself which have been due for more than 27 months now. A large number of retired bankers have died waiting for 100% neturalisation of their DAs, forget about how many lakhs are waiting for the updation of pension.
The biggest question which arises now is that when both the parties were ready for next round of negotiations, what stopped them to agree on next date even before the Chief Labour Commissioner had called them for reconciliation. I can think of only two reasons :-
(a) One reasons can be that both the parties are illiterate and do not understand the nitty-gritty of wage negotiations and needs an outsider to make them understand these and then force them to come to the table for negotiations. I am sure no reader will agree that ex-Chairman of a PS Bank is so illiterate or novice that he is not aware of the law relating to reconciliation proceedings. Even UFBU leaders are not totally illiterate and I am sure they are well aware of the laws relating to strike and conciliation proceedings.
In this tussle, I think IBA has to share bigger blame. UFBU has a large cadre and with its creditability already eroded, I think it would have been more difficult for UFBU to start this initiative. They could have done only by following transparent system. In case of ego clashes, the employer (in this case IBA is representing them) has to shed his ego and show large heartedness as they are the givers. It is the duty of IBA Chairman, IBA, Chief Executive Officer to continue their dialogue with GoI and convince the GoI / MoFs that such adamant attitude can hurt the sentiments of over 8 lakh workers which will not be good for the nation in the long run.
There is a need to remember that by mere brute power, Government can ignore and crush sometimes the legitimate demands of workers, but its implications will have much bigger ramification in the long run as moral of the employees goes down and their dedication towards the organization gets dented. Therefore, I believe it was a foolish act of IBA to wait for CLC meeting for next round of talks.
Always remember that when children become too adamant, it is only parents who needs to show some flexibility. If they fail, it can lead to crimes like honour killing, which leads to death of children and jail for parents. No one will be winner in such honour killings merely to keep their egos intact.
I hope this message goes to IBA and GoI and they show the necessary flexibility or else consequences will be of long term and it may take years before the banking industry can be brought to track.
Press Release by Com Ch Venkatachalam, General General Secretary, All India Bank Employees' Association
Press Release
- ALL INDIA BANK STRIKE – 4 DAYS FROM 25TH TO 28TH FEB. 2013
- CONCILIATION MEETING HELD IN DELHI TODAY
- IBA COULD NOT IMRPOVE THEIR OFFER BUT FURTHER BIPARTITE MEETING TO CONTINUE ON 23RD FEB AT MUMBAI
- HENCE STRIKE CALL STANDS AND WILL DEPEND ON OUTCOME OF TALKS ON MONDAY
In response to the strike call issued by the unions, the Chief Labour Commissioner Shri P P Mitra held a conciliation today in his office in Delhi. Mr M V Tanksale, Chief Executive of Indian Banks’ Association, (IBA) and Mr K Unnikrishnan, Dy. Chief Executive IBA participated in the meeting. From the Unions, on behalf of United Forum of Bank Unions, Convener M V Murali, C H Venkatachalan, General Secretary, AIBEA and other leaders participated. From the Finance Ministry Mr Gulab Singh, Dy. Secretary participated.
During the conciliation meeting, the IBA requested the Unions to defer the strike call so that further negotiations can continue. Unions pointed out that when earlier strike call was deferred there was no positive response from IBA and unless IBA can come out with further positive improvement in their offer, it is not possible to defer the strike.
After discussions, the CLC advised that one more round of direct bipartite talks be held to find out an amicable solution and it is advisable to avoid strike in the banking sector in the interest of the economy.
Accordingly, IBA has fixed further direct bipartite negotiations between IBA and UFBU at 11-30 AM at Mumbai on 23rd Feb. Monday. Unions have agreed to participate in the talks.
So far IBA has offered an increase of 13% i.e Rs. 4095 crores. Unions want the IBA to substantially improve their offer. Unions have also offered to further negotiate on their present demand of 19.5% to find out an acceptable solution.
We hope that the Government of India would intervene and help in arriving at an amicable understanding on the demands. If no tangible and positive outcome would be there in the negotiations on 23rd, Unions would be constrained to implement their 4 days strike from 25th Feb.
Reserve Bank warns banks against making "mockery" of its lending operations-DNA 20.02.2015
The Reserve Bank of India is getting tougher on extending unlimited credit to the country's banks to try to ensure they push interest rate cuts through the financial system and to stop them from making what one official called a "mockery" of its operations.
India's commercial banks readily borrow from the central bank at the policy rate but then lend that money out at a high rate, in what RBI Governor Raghuram Rajan describes as a culture of "lazy banking." The RBI argues this reduces the effectiveness of its monetary policy decisions and the cheap funding rates for banks are not passed on to retail and corporate borrowers at a time when the economy is only gradually recovering from a slowdown.
"They have made a mockery of our monetary policy transmission framework," said one official familiar with the RBI's thinking.
Another senior official with knowledge of the central bank's views said the RBI wanted to end a "whenever you want, you come" mentality that many lenders had regarding funding.
Reducing banks' reliance on overnight funding from the central bank is a key part of Rajan's goal of reforming Indian money markets unveiled in January 2014.
The RBI believes that banks which manage their assets and liabilities without always tapping the central bank for cash, will be more efficient and so will react more quickly to changes in monetary policy through their deposit and lending rates.
India's banks rely on overnight borrowings to fund longer-term lending and these rates are often volatile. Furthermore, tight liquidity constrains lending with banks worried they will be caught short of funds, according to
bankers.
Only three of 45 commercial banks have cut base lending rates since the RBI's surprise easing this month, hurting the government's drive to lift business investment.
The sources said the RBI is adamant it will not inject additional liquidity after loosening the statutory liquidity ratio further to give banks more available cash. The ratio is the proportion of deposits that banks must hold in government bonds, cash or gold.
It also ruled out for now introducing longer-term repos beyond the 7-day and 14-day repos.
OLD WORLD
A firm RBI stance risks increasing market volatility at a time when analysts expect the central bank to cut rates by another 50 to 75 basis points this year after last month's 25 basis point cut.
The overnight cash rate surged to as high as 26% this month. Ideally, it should closely track the RBI's 7.75% repo rate, the key policy rate. Tough-love tactics by China's central bank in 2013, seen as a way to stop banks from using short-term funds to mask their activities in risky wealth management products, also sparked spikes in short-term lending rates.
"These banks are still in the old world," said a senior executive at a large primary dealership.
"Earlier it was free-for-all. Right now, the system has improved in terms of predicting shortfalls. And RBI is managing shortfall dynamically. It is the problem of the banks not the problem of the RBI."
That is not how domestic banks see it. Bank executives complain the RBI consistently underestimates how much money banks need and does not provide enough clarity on how much it plans to inject on days it anticipates tighter cash conditions.
India's commercial banks readily borrow from the central bank at the policy rate but then lend that money out at a high rate, in what RBI Governor Raghuram Rajan describes as a culture of "lazy banking." The RBI argues this reduces the effectiveness of its monetary policy decisions and the cheap funding rates for banks are not passed on to retail and corporate borrowers at a time when the economy is only gradually recovering from a slowdown.
"They have made a mockery of our monetary policy transmission framework," said one official familiar with the RBI's thinking.
Another senior official with knowledge of the central bank's views said the RBI wanted to end a "whenever you want, you come" mentality that many lenders had regarding funding.
"It is not actually the responsibility of the central bank to always keep the tap open," he said.An RBI spokeswoman did not have immediate comment.
Reducing banks' reliance on overnight funding from the central bank is a key part of Rajan's goal of reforming Indian money markets unveiled in January 2014.
The RBI believes that banks which manage their assets and liabilities without always tapping the central bank for cash, will be more efficient and so will react more quickly to changes in monetary policy through their deposit and lending rates.
India's banks rely on overnight borrowings to fund longer-term lending and these rates are often volatile. Furthermore, tight liquidity constrains lending with banks worried they will be caught short of funds, according to
bankers.
Only three of 45 commercial banks have cut base lending rates since the RBI's surprise easing this month, hurting the government's drive to lift business investment.
The sources said the RBI is adamant it will not inject additional liquidity after loosening the statutory liquidity ratio further to give banks more available cash. The ratio is the proportion of deposits that banks must hold in government bonds, cash or gold.
It also ruled out for now introducing longer-term repos beyond the 7-day and 14-day repos.
OLD WORLD
A firm RBI stance risks increasing market volatility at a time when analysts expect the central bank to cut rates by another 50 to 75 basis points this year after last month's 25 basis point cut.
The overnight cash rate surged to as high as 26% this month. Ideally, it should closely track the RBI's 7.75% repo rate, the key policy rate. Tough-love tactics by China's central bank in 2013, seen as a way to stop banks from using short-term funds to mask their activities in risky wealth management products, also sparked spikes in short-term lending rates.
Yet, lacking any means to penalise banks beyond verbal arm twisting, analysts say the RBI will struggle to change banks' behaviour, with only a few incentives left such as shifting the timings of fund infusions to earlier in the day when cash needs are higher.Banks have grown accustomed to easy overnight funding because the RBI was previously seen as always willing to inject funds, a practice that Rajan derided as "bailing out the banking system" and subsequently curbed.
"These banks are still in the old world," said a senior executive at a large primary dealership.
"Earlier it was free-for-all. Right now, the system has improved in terms of predicting shortfalls. And RBI is managing shortfall dynamically. It is the problem of the banks not the problem of the RBI."
That is not how domestic banks see it. Bank executives complain the RBI consistently underestimates how much money banks need and does not provide enough clarity on how much it plans to inject on days it anticipates tighter cash conditions.
A senior treasury official at a large state-run bank said as a rule of thumb it kept a daily cash cushion of 4 to 5 billion rupees ($64-$80 million) to guard against any unexpected demand for funding from retail or corporate customers."The only solution I see is that they (RBI) will have to give more cash," he said.
Venkatram Reddy did not cooperate with investigation though he was issued 10 notices to appear. He turned up only twice but he did not even open his mouth on one occasion, the CBI public prosecutor M.R.P. Babu told the court of the metropolitan magistrate which heard the plea of the investigating agency for custodial interrogation of Venkatram Reddy and his brother and vice-chairman Vinayak Ravi Reddy at its Banking Securities and Fraud Cell in Bengaluru. The magistrate reserved the order on the arguments for Saturday.
Mr. Babu said the DCHL produced ‘false’ and ‘fabricated’ documents to cheat Canara Bank by taking the loan but the defence counsel denied anything of the sort on the part of the company and said the case against the brothers was merely for alleged default in repayment of loan. He also said they were signatories to all the documents in the deal. Besides, the CBI also suspected the role of bank officials who processed and sanctioned the loan.
The CBI wanted to confront the brothers with voluminous records seized from Deccan Chronicle office and other premises in July 2013.
The defence counsel E. Uma Maheswara Rao argued that the CBI booked the case to mount pressure on the management to clear the loan. It was a private transaction whose remedy lay with the Debt Recovery Tribunal under the SARFAESI (Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest) Act. But, the bank dashed off a complaint to CBI eight months after moving the tribunal.
Special status granted
He denied DCHL did not cooperate with investigation as 15 executives of the company visited BS & FC at Bengaluru 27 times to furnish information whenever requ-ired. The CBI sought police custody with a malafide intention and there was a strong apprehension that it will be misused. He feared the court will lack jurisdiction if something went wrong with the accused in Bengaluru.
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